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Lowell City Council expected to shift tax burden more to business

By Lyle Moran, lmoran@lowellsun.com

Updated:
12/03/2012 07:11:15 AM EST

LOWELL -- The City Council is slated to vote Tuesday night on whether to shift the property-tax burden away from residential property owners to commercial, industrial and personal property owners by the maximum amount allowed under state law.

Adopting the "Minimum Residential Factor" would shift the tax burden away from residential property owners to the other classes of property by a factor of 1.75, or 175 percent.

The council has adopted a similar shift in previous years, almost always unanimously.

This year's public hearing on the shift will be Tuesday starting at 7 p.m.

City Councilor Joseph Mendonca was the lone vote against the maximum tax shift in 2011, arguing that there are a lot of sole proprietors in the community who are getting hit "very hard" by the ever-rising commercial tax rate.

Mendonca told The Sun he intends to vote against the maximum shift again this year.

"I have had businesses complain to me that since they moved here, their tax rate just keeps going up and up," Mendonca said. "I want to keep the commercial rate from going too high."

Mendonca, chairman of the council's finance subcommittee, said he would support a somewhat smaller shift in the tax burden to prevent the commercial and industrial tax rate from rising above $30 per $1,000 in assessed value.

In the fiscal year that ended July 1, the commercial, industrial and personal property-tax rate in Lowell was $30.89 per $1,000 in assessed value. The residential rate last fiscal year was $14.77 per $1,000 in assessed value.

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City Councilor Ed Kennedy said he is a longtime supporter of the ability of cities and towns to shift the tax burden away from residents, and he plans to vote in favor of the Minimum Residential Factor.

"I think residents pay a lot of money right now as it is, so I will not vote to shift money from the businesses to the residents," said Kennedy, who earlier this year joined Mendonca and Councilor Rodney Elliott in calling for a budget without a tax increase.

No matter how the council votes on the tax shift, the city's tax levy will only rise by the amount of new growth generated in the city last year, City Manager Bernie Lynch said.

That figure, which must be certified by the state, is expected to be between $1.2 million and $1.4 million, according to Lynch.

New growth includes properties that have increased in assessed valuation because of development or other changes; exempt property that has returned to the tax rolls; and new subdivision parcels and condominium conversions.

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